Need to speedy up passage of PIB

The Petroleum Industry Bill (PIB) has become the subject matter of most of oil and gas industry’s fora. The Ministry of Petroleum Resources under Mrs. Diezani Alison-Madueke is gradually delivering on its promises but the PIB is where the attention ought to focus, writes EMEKA UGWUANYI.

Hardly does any oil and gas forum hold without a mention of the Petroleum Industry Bill (PIB) and the consequences of its non-passage into law by the National Assembly. As the bill, stands, it doesn’t need only quick passage, it also needs to be thoroughly deliberated upon so that on passage it should be a balanced Act that would benefit all stakeholders in order to attract the desired investments into the oil and gas industry.

The non-passage of the PIB, according to experts, is responsible for lack of new investment in the upstream sector of the industry in the last couple of years. Industry operators had continued to stress the diversion of investment in the sector to Ghana, Angola, Equitorial Guinea, and Mozambique as well as other emerging countries where oil have been found.

The Minister of Petroleum Resources made efforts in the past even to the point that she assured Nigerians that the bill would be passed into law by the sixth assembly. But the efforts and promises were fruitless as the National Assembly could not pass it. Nigerians are expectant that the seventh assembly would make history by deliberating on the document and passing it into law. The ministry, it was learnt, has begun to make fresh efforts to see the passage of the bill.

Upstream

The Director, Department of Petroleum Resources (DPR), Osten Olorunsola, at a forum said that in the past five years no new investment has been made in the upstream sector. He also noted that in recent times oil is being found in commercial quantities in many parts of Africa apart from countries in the Gulf of Guinea, an area believed to be still holding substantial reserves of hydrocarbon. He said that the earlier Nigeria maximizes the benefits of this natural resources, the better for all Nigerians because investors including those in Nigeria are increasingly considering all these emerging options.

The implication of this development is that as there is no exploration, the country depends on existing reserves. When the reserves are depleted without replacement, we should be worried as a country, said the President of the Nigerian Association of Petroleum Explorationists (NAPE), Dr. Afe Mayowa.

Mayowa said that there was urgent need to replace consumption through aggressive exploration to ensure growth in reserves, energy security and sustained revenue inflow, especially as the country’s main source of revenue is oil and gas.

According to these experts, the passage of PIB is the only reliable option to unlock the potentials of the petroleum sector as well as the attendant benefits for Nigerians. The PIB, which when passed into law, is believed would remove the bottlenecks, bureaucracies and inefficiencies associated with government controlled entities. It as it would also release many agencies and policies from the strangle-hold of the government.

Alison-Madueke constituted committees made up of experts to work on the bill before it was submitted to the National Assembly for consideration. The essence of the committees’ inputs is to address some grey areas and contentious provisions.

Downstream

With what has been happening in the downstream sector of the industry since the beginning of the year especially the marketing arm, the probe and counter probe of transactions necessitated by the House of Representatives’ adhoc committee’s oil subsidy programme probe, which unveiled the rot in the sector, transparency is gradually being engendered into the downstream.

The passage of PIB will bring about deregulation, which will open up the downstream and put an end to the undue fleecing of Nigerians by a few marketers and privileged Nigerians. In the past couple of weeks, fuel scarcity has been lingering in different parts of the country because it is the Nigerian National Petroleum Corporation (NNPC) alone that has been importing petrol. The marketers have refused to import as a result of non-payment of their outstanding subsidy claims put at about N200 billion. Some retail outlets have in view of the fuel scarcity been selling the product above the regulated pump price of N97 per litre. Some stations sell at between N110 and N140 per litre in the hinterland.

Besides, some unscrupulous people cash in on the situation to sell adulterated fuel to the unsuspecting motorists, while others hawk the products at exorbitant prices. According to industry operators, the passage of the PIB would address the problems.

Gas development

In the power sector, there has been a significant improvement in power supply following increased gas supply to thermal power plants. In the recent past, inadequate gas supply had almost crippled the power sector cutting generation to almost half to a little over 2000 megawatts (MW).

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, in order to ensure increased gas supply to facilitate power generation in the country, had ordered an aggressive implementation of the ongoing 12-month gas emergency timeline for a speedy expansion of the gas-to-power programme, which the international oil companies (IOCs) bought into.

The minister had pledged the Federal Government’s commitment to work with IOCs to meet the gas to power aspirations. She noted that a speedy gas to power can only be attained if the oil majors work in concert with local Nigerian service providers.

She said: “We can only build a reliable oil and gas sector through the effective participation of competent Nigerian service providers and operators. Thank God the IOCs and the indigenous companies and some Nigerian professionals are already keying into this opportunity made possible by the Nigerian Content Act.”

The Managing Director, Shell Petroleum Development Company (SPDC) and chairman Shell Companies in Nigeria, Mutiu Sunmonu, said that Shell has taken adequate steps to improve gas supply to the power plants in the country.

Sumonu said that the company was already keying into the Federal Government’s 12 months gas emergency plan meant to boost power generation. “We at Shell are committed to realizing government’s gas emergency plan so as to boost gas supply in the country,” he said.